Insurgents in Iraq have attacked a government compound north of Baghdad, killing at least 16 policemen and freeing more than 30 prisoners.

Police say about 100 heavily armed insurgents stormed the compound in Muqdidiya early Tuesday morning. They set fire to the police headquarters building and also attacked a court house.

Police say at least 15 insurgents were killed in the ensuing gunbattle with security forces.

The insurgents detonated a string of roadside bombs as they fled before U.S. and Iraqi army reinforcements arrived.

Elsewhere, in Karbala, south of Baghdad, a major Shi'ite Muslim religious observance attended by hundreds of thousands of pilgrims reached its peak Monday without the bomb attacks that killed dozens of pilgrims the past two years.

President Bush said Monday that he understands the continuing violence in Iraq has shaken the confidence of Americans. But he said there is progress that makes him optimistic about Iraq's future.

The president's speech, in Ohio, was one in a series he has given on the third anniversary of the U.S.-led invasion. Recent opinion polls indicate dwindling public support for Mr. Bush and the war.